Brown to target credit card firms

Gordon Brown promised action last night after credit card companies rejected calls to reduce interest rates, some as high as 69 per cent, after last week’s shock cut in the Bank of England’s base rate. In a clear signal that the prime minister is determined to make credit cards his next battleground
, he used his monthly press conference yesterday to call for a ‘new, responsible approach’ to lending. Average interest charged on the approximately 72 million credit cards in circulation has risen to 17.6 per cent from 16.8 per cent a year ago, according to data analysts Defaqto, despite the Bank’s base rate almost halving from 5.75 per cent to 3 per cent over the same period. Store card rates have risen faster, up by 1 per cent over the past six months with the most expensive now charging shoppers more than 30 per cent. Downing Street said last night credit card companies were behaving ‘irresponsibly’. But yesterday PayPal increased the rate on its card from 12.9 per cent to 16.9 per cent, and other leading providers said their rates were likely to remain on hold.